Financial issues at child agency
Under scrutiny: Govt’s Oranga Tamariki
Documents show Oranga Tamariki has been stumbling towards budget blowouts with loose and patchy financial controls. Its shortcomings in protecting children have been the subject of more than a dozen inquiries, the most recent last week finding five gaps had contributed to the brutal death of 5-year-old Malachi Subecz.
But at the same time, a series of unheralded but also scathing financial reviews of the agency have been unmasking — internally at least — many major basic failings.
“As has been articulated in previous internal OT papers, there is a lack of understanding of the drivers of children’s costs and the services required at different levels of need,” independent reviewer KPMG said earlier this year.
There was “an apparent lack of an accountability culture for spending decisions and staying within budget at all levels of the organisation”.
“OT does not have a framework for determining the extent to which initiatives represent value for money,” the reviewer said.
KPMG was called in as OT headed towards a blowout of up to $50 million on its 2021-22 budget, and following Treasury’s finding last year of OT’s “loose fiscal controls” around $1.1 billion of spending in the 2019-20 Budget.
At stake was delivery of half a billion dollars of contracts a year to care for at least 5000 children.
KPMG found not only were social workers without financial training making many budget calls, but the actual experts in the finance section faced a gaping hole.
“The funding and performance team has limited understanding of the core business in OT such as services for children and families,” it said in May after interviewing staff.
“We heard disappointment at the lack of modelling and forecasting from the budget holders’ survey.”
KPMG said without a clear understanding of OT’s cost base and the key drivers for the cost of children in care, it was difficult for finance to:
■ Accurately forecast expenditure
■ Provide insights into spending patterns and trends
■ Identify opportunities for cost savings
One staffer was quoted saying: “The message about doing whatever the tamariki and whānau need has been taken very literally and has led to sloppy financial decisions“.
KPMG recommended a series of overhauls.